Children of MEND  

The Australian has a report on a conservative terror campaign in Bolivia aimed at seizing control of the gas fields - Morales warns on Bolivian violence. Bob Morris has some background on recent events in Bolivia.

President Evo Morales struggled to assert control over Bolivia yesterday as right-wing demonstrators set fire to a town hall and blockaded highways in four opposition-controlled provinces, causing shortages of food and petrol. At least 30 people have been killed in the Andean nation this week, Interior Minister Alfredo Rada said.

All the deaths occurred in Pando province, where Mr Morales declared martial law on Friday, dispatching troops and accusing right-wingers of killing his poor peasant supporters.

The governor of gas-rich Tarija, representing the four eastern provinces that are in rebellion against the Government, said before beginning talks with Mr Morales over the weekend that half the country was blockaded by opposition barricades along 35 highways. "Also paralysed are borders with Argentina, Brazil and Paraguay," said Governor Mario Cossio, who said he hoped to lay the groundwork for a truce. ...

Mr Morales's spokesman, Ivan Canelas, said an armed group set fire to the town hall in Filadelfia, a municipality near Cobija, early on Sunday. "There are people who want to continue sowing pain across the region," he said.

The gravest challenge to Mr Morales in his tenure of nearly three years as Bolivia's first indigenous president stems from his struggle with the four lowland provinces where Bolivia's natural gas riches are concentrated and where his Government has all but lost control. Right-wing saboteurs last week briefly cut the natural gas flow to Brazil, which depends on Bolivia for about half its gas consumption.

The rulers of the rich provinces are seeking greater autonomy from Mr Morales's left-wing government and are insisting he cancel the referendum due on January 25 on a new constitution that would help him to centralise power, run for a second consecutive term and transfer unused land to the landless peasants. Mr Morales says the new charter is needed to empower Bolivia's poor indigenous majority.

Mr Morales and his ally, President Hugo Chavez of Venezuela, expelled the US ambassadors from their countries last week to protest at what they called Washington's incitement of the right-wing protesters.

The Oz also reports that MEND militants in Nigeria's delta region have declared an "oil war" - Shell attacked in Nigerian oil war.

Militants yesterday attacked a Shell facility in Nigeria's restive southern Delta region, a day after an armed group declared an "oil war", a military official said. The Movement for the Emancipation of the Niger Delta (MEND), the most prominent armed group in the region, which had declared the "oil war", said it was responsible for the attack in Rivers State, claiming to have destroyed the Anglo-Dutch group's Alakiri station.

The facility was attacked and set alight just after midnight with "dynamite and other explosives", but "the attack was beaten back", Lieutenant-Colonel Moussa Sagir said. Colonel Sagir said an exchange of gunfire pitted armed men who arrived on a dozen or so speedboats against a joint military taskforce. MEND said in an email to the media that an operation code-named Hurricane Barbarossa had "razed the station to the ground". ...

MEND has changed the security paradigm in oil-rich southern Nigeria since its emergence in early 2006 - multiplying attacks, kidnappings of foreign oil workers and sabotage on land and offshore. It has caused Nigeria to lose one-quarter of its oil production, costing Lagos its place as the biggest crude oil producer in Africa, with Angola recently taking that title.

The group says that it is fighting fora larger share of Nigeria's oil revenue to go to local populations. In June, it attacked Bonga, the flagship deepwater field of Anglo-Dutch giant Royal Dutch Shell. Sited 120km from Nigeria's coast, Bonga had, until that attack, been seen as safely out of the reach of militant raids.

Jeff Vail has the next installment of his series on geolpolitical feedback loops and oil supply disruptions - Geopolitical Disruptions #2: Identifying the Feedback Loops.

This post, the second in a series on Geopolitical Feedback Loops (see part 1 here), will outline the various geopolitical feedback loops that operate to disrupt oil and resource production. I've tried to link most of these feedback loops around a common theme of ownership dispute, illustrated below. There are several examples for each feedback loop, but in the interest of time I've just listed them and linked to further information--each could be a post in its own right.

Figure 1: Does the state own oil reserves or the nation? When the two are contiguous it makes little difference, but as they become increasingly dissimilar the dispute drives conflict. While I haven't divided the feedback loops explicitly along ownership lines, this graphic may help conceptualize these processes as a single system.

GFL1: "Nation"/State Conflict

Explanation: Who owns the oil, the state or its constituent nation(s)? Throughout the 20th Century, the international order was defined by the Nation-State system that developed out of the Peace of Westphalia. As Philip Bobbitt explained in his seminal work, The Shield of Achilles, the constitutional basis of the modern Nation-State is that the State provides for its constituent Nation. For this system to work, there must be close overlap between the State and the Nation.

This, of course, has always been a fiction to some degree as States have generally cobbled together numerous national and affinity groups with less than total exclusivity and attempted to mold a "national character" out of them that is contiguous with the boundaries of the State. Today, for a variety of reasons, this order is rapidly falling apart. As a result, nations and states are increasingly in conflict over self-determination and, critically, resource control.

When a Nation (or any other non-state group such as a religion, issue group, or affinity group--I am using the broad term "Nation" here only for simplicity) has a dispute with a controlling state over control or use of a resource such as oil, gas, etc., the importance and motivation to escalate to violence in pursuit of resource control is, at least partially, a function of the value of the resource in dispute. Because these conflicts have the tendency to increase the scarcity, and therefore value, of the resource, this type of conflict forms a positive feedback loop. In addition to this positive feedback nature, this process also expands in scope as it intensifies: resource ownership that was minimally relevant a few decades ago (e.g the Arctic, or Canada's tar sands) is now becoming an important source of conflict (this tendency towards scope-expansion also runs though many of the feedback loops identified below).

In the interest of brevity, for a more in-depth look at the fundamentals behind this feedback loop see my paper The New Map. I list this feedback loop first because I think it may be the least understood, and has the potential to mushroom into one of the largest sources of supply disruption within a decade or two. It serves as the foundation of the concept of resource ownership disputes illustrated in the headline graphic. As with all the opposing pairs illustrated above, when the two overlap perfectly (e.g. "nation" and "state" or "legal owner" and "moral owner") there is no problem, but as these opposing notions begin to diverge the foundation for sustained conflict is created.

Examples (Oil & Gas): Nigeria (Ijaw/Igbo/etc.), Iraq (Kurd, Shia, Sunni), Canada (First Nations), Iran (Awhaz, Baloch), Angola (Cabinda), Mexico (Zapatistas/EPR), Saudi Arabia (Islamists), Yemen (al-Qa'ida, tribes), Sudan/Chad (SLA, Darfur), Ethiopia (Ogaden), UK (Scotland). Other resources: Morocco (Sahrawi Rebels - Rock Phosphate), Indonesia (Iriyan Jaya - various metals), Democratic Republic of Congo (LRA - diamonds & other minerals), Israel/Palestine (aquifers & surface water), American West (surface water compacts). ...

GFL8: Export Land Model (ELM)

Explanation: Rising oil prices increase revenues for oil exporting countries. These rising revenues generally drive consumption in exporting countries (e.g. more wealth means more people can drive larger cars, more food security means rising populations, etc.), which in turn reduces exports. In some circumstances (generally where the exporter is a major player such as Saudi Arabia or Russia) declining exports may increase price enough to keep net export revenues rising--in these situations this forms a positive feedback loop. In other cases, where rising consumption results in lower overall export revenues, a negative feedback loop is created. Westexas, Khebab, and others have already done outstanding work on this topic--I have included this feedback loop at the end of this list not because it is least important (it is probably most important, at least in the near term), but because it has been most exhaustively covered previously.

Example: Real world examples of ELM in action include Indonesia, Egypt, Malaysia, and Mexico. In the near future, its impact in major exporting states like Saudi Arabia and Russia may be most significant.

Quantifiable Disruptions in Nigeria & Iraq

The EIA estimates that, as of April 2007, Nigeria had 587,000 barrles per day of production shut in by violence--primarily the Nation/State, Priavateering, Corruption, and Targeting/ROI feedback loops. However, the EIA also estimates that Nigeria has 3.2 million barrels per day of production capacity. A single attack has shut in as much as 345,000 barrels per day for a brief period, and the amount shut in at any given time is highly variable. Recently, Nigerian production has been hovering just below 2 million barrels per day, and has even dropped briefly below 1 million barrels per day, suggesting the actual shut-in figure is far higher.

In Iraq, oil production is just now nearing pre-war production levels of 2.6+ mbpd. While some officials claim Iraq could surpass 3 mbpd in 2008, critical political compromises splitting resource ownership between the federal governments and Iraq's three main ethnic/sectarian groups have not been reached. The oil shut in since the invasion (and the oil that future violence may shut in) can be attributed to various feedback loops: military adventurism driven by resource insecurity, nation/state violence, corruption, and targeting/ROI.

Conclusion

Here, I've listed the examples that I can think of for each feedback loop. If readers have additions, changes, etc., please add these in the comments. The links are not intended to be definitive sources of information about each feedback loop in action, but rather a jumping-off point for research and discussion.

The next and final post in this series will discuss the interrelationships between these feedback loops and prospects for solving, or at least mitigating, their impact.